Home-grown FMCG product maker Emami intends to double its rural coverage in three years, with an aim to reach 60,000 towns by the end of FY24, according to the company’s managing director S K Goenka. The initiative is being taken up under its Project Khoj. As of FY21 Emami’s reach in non-urban areas was 32,000 towns.
“In a country as vast and as populous as India, the challenge is not as much in branding and manufacturing as much as in placing the product just where the consumer needs it,” said Goenka in the company’s annual report for 2021-22.
“We intend to double our rural coverage to 60,000 towns in 13 states in three years, broadbasing coverage and seeding locations with Emami products for the first time,” Goenka said.
In FY23, Emami intends to maintain strong margins on the back of stringent cost control and volume-led growth. It plans to absorb the increase in raw material costs through operational efficiency and judicious price increases.
“The company would like to invest aggressively in new launches as well as its core brands for growth opportunities,” said Emami over the outlook for FY23.
Emami is expanding its distribution coverage, placing the product just where the consumer needs it.
The Kolkata-headquartered company will also address the shifts transpiring in its urban markets as well after the pandemic as consumer purchase behaviour is changing.
It has created a separate marketing and distribution network for 10-12,000 standalone modern trade stores. This focus has been extended to e-commerce as well.
“We believe that the world is moving towards convenience-driven platforms. Your company was nimble enough to capitalise on this consumer transition,” said Goenka.
Emami’s modern trade revenues grew 17 per cent in FY22, while its e-commerce focus doubled revenues and contributed 5.5 per cent to its domestic business. In the previous year, the contribution from online sales channels was 2.8 per cent.
It is also a growing focus on sales through e-B2B (Business-to-Business) and D2C (Direct-to-Consumer) channels.
“The company’s modern trade and e-commerce channels are expected to report robust growth. Emami products are expected to be available across all key formats (including e-pharma and quick commerce accounts apart from marketplaces like eGrocers),” said Emami.
The company plans to strengthen its digital-first portfolio across all key brands. Emami has launched digital-first products across Zandu, Navratna and Kesh King brands.
“The company’s modern trade business will launch digital-first brands through omni-channels, increasing the contribution of Zandu Ayurvedic Healthcare’s portfolio to 10 per cent of the total modern trade business,” the annual report said.
Now Emami has also recognised that the key to long-term sales sustainability would be derived from relationship-driven sales engagements.
It has launched outlets for healthcare products, focusing on Ayurvedic bhandars and chikitsalayas. It has also rolled out a pilot project in select cities wherein the company launched an upsell and crosssell application for the frontline sales team.
“The company will introduce more such technology-based distribution initiatives to accelerate offtake,” he said.
During the financial year ended on March 31, 2022, Emami’s revenue stood at Rs 3,192 crore.
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